UAE VAT & Compliance

UAE VAT Supplier Verification: FTA Decision No. 13 from 1 October 2026

Before claiming input VAT, check the supplier, the purchase and the evidence. A practical guide to the October 2026 rules, exact thresholds, payment exceptions and the latest related VAT amendments.

NRS Editorial Desk · Published 2026-09-10 · Updated 2026-09-11 · 16 min read

From 1 October 2026, FTA Decision No. 13 of 2026 requires UAE taxable persons to perform and document supplier and transaction checks before deducting input VAT, subject to a limited small-supply exception. A valid invoice remains important, but it does not replace verification of who supplied the goods or services, whether the transaction is genuine and how payment is justified.

For owners searching for the new business rules in UAE, the immediate task is to connect procurement, accounts payable and VAT review. Establish which suppliers need checks, who approves exceptions and where the evidence will be kept before the October change takes effect.

The October 2026 supplier checks at a glance

Question	Decision No. 13 position
When does it start?	1 October 2026. The decision was issued on 22 July 2026.
Who is covered?	Taxable persons: persons registered or required to register under the VAT Law, in relation to verification before input tax deduction.
What is checked?	The supplier and each taxable supply received or accepted, subject to the exception.
What is the small-supply exception?	Consideration below AED 10,000, excluding VAT, subject to the same-supplier AED 100,000 test.
When are bank and reputation checks added?	Supplier supplies exceeding AED 375,000 in the previous 12 months or expected to exceed that amount in the next 12 months.
How often are supplier checks done?	First dealing; then recurring dealings where no verification was done in the previous 12 months.
Must the process be written down?	Yes. Retain verification evidence and a policy assigning implementation, review and supervision responsibilities.

Why an invoice alone may not protect input VAT recovery

Input VAT is VAT paid or due on purchases or imports. Recovery depends on the VAT Law's conditions, including the purpose of the purchase and the relevant invoice, import and payment requirements. Decision No. 13 adds a verification framework; it does not make otherwise blocked or ineligible expenditure recoverable.

Article 54(bis), added by Federal Decree-Law No. 16 of 2025, addresses supplies connected with tax evasion. The FTA must reject the deduction where that connection and the buyer's actual knowledge are established. It may reject it where the buyer should have known. Failure to carry out the prescribed verification feeds into that deemed-knowledge test. The connection to tax evasion remains part of the legal test; a missing document does not automatically cancel every VAT claim a business makes.

AED 10,000, AED 100,000 and AED 375,000: three different tests

Start with the value of the taxable supply, then examine the same supplier's totals. Article 6 expressly excludes VAT from the AED 10,000 consideration test. Its wording is less than, so exactly AED 10,000 is outside the exception. The aggregate supplier tests use exceeds, not equals or exceeds, and look both backwards and forwards over 12 months.

Test	Threshold	What changes
Individual supply	Below AED 10,000 excluding VAT	The decision's verification measures may be disregarded only if the same-supplier exception condition also holds.
Same supplier: previous or expected next 12 months	Exceeds AED 100,000	The small-supply exception is unavailable, even for a purchase below AED 10,000.
Same supplier: previous or expected next 12 months	Exceeds AED 375,000	Add the authorised UAE-bank confirmation and public-information/reputation assessment under Article 3(4).

Do not confuse the supplier-spend test with VAT registration simply because AED 375,000 is a familiar registration figure. Here it measures supplies received from one supplier. Nor should you reset the analysis on 1 January or consider only the current VAT quarter. Record both the previous 12 months and credible expected purchases in the next 12 months.

Worked examples for purchase teams

Illustrative facts	Result under the decision
One AED 9,500 supply before VAT; supplier totals AED 80,000 previously and AED 90,000 expected	The Article 6 small-supply exception may be used. Ordinary VAT requirements still apply.
One AED 10,000 supply before VAT, even with low annual supplier spend	Not below AED 10,000: the small-supply exception does not apply.
AED 8,000 monthly supplies, with another AED 20,000 order expected in the next 12 months	Expected total is AED 116,000. The small-supply exception is unavailable even though each monthly supply is small.
AED 7,500 supply; previous supplier total AED 120,000, expected total AED 70,000	The previous-12-month test already removes the exception.
Supplier total exactly AED 100,000 in both periods, with no expected excess	Equality alone does not trigger the aggregate override. Each supply must still be below AED 10,000 for the exception.
Supplier total exactly AED 375,000, with no expected excess	Article 3(4)'s extra threshold is not crossed by equality alone. The other required checks still apply.
Previous supplier total AED 300,000; expected next-12-month total AED 400,000	Obtain the Article 3(4) bank confirmation and perform the reputation assessment before relying on the relevant input VAT deduction.

Supplier verification: identity, premises and risk indicators

For a natural-person supplier, Article 3 requires a copy of valid identity evidence, such as an Emirates ID or passport, and a meeting in person or virtually before the supply. For a legal-person supplier, verify incorporation through official databases or obtain incorporation evidence with valid, consistent details. Also obtain valid identity evidence for the authorised director, agent or employee representing that supplier.

Check that an actual place of business exists using appropriate electronic means or a field visit, and that it fits the supplier's activities. The decision does not require a physical visit in every case. A practical file could contain dated registry results, incorporation records, a representative check and evidence supporting the premises assessment.

Address changes more than twice in the previous 12 months are a specified risk indicator.
Changes in key employees more than twice in the previous 12 months are another indicator; this includes managers and the people with whom the buyer deals.
Transaction volume, value or nature that is disproportionate or unexpected compared with the supplier's size and business history also needs attention.
If an indicator applies, retain a clear, justified explanation supported by the available evidence, ready to provide to the FTA on request.

For example, a supplier may have a documented reason for expanding premises or replacing management. Record that reason and its evidence instead of treating a ticked risk box as either automatic approval or proof of evasion. Unsupported assurances are weaker than a dated explanation connected to independent records.

Above AED 375,000: bank confirmation and reputation checks

When either supplier-spend test exceeds AED 375,000, obtain written confirmation issued by an authorised bank in the UAE that the supplier has a bank account. It must have no relevant reservations or conditions, but it need not be addressed specifically to the buyer. An IBAN typed on an invoice is not the written bank confirmation described in Article 3(4).

Also review available client recommendations and assess public reviews and media coverage from reliable sources against the nature and size of the business and indicators of suspected tax evasion. A practical review log should identify the sources checked, the date, findings and any escalation. An absence of online reviews is not evidence that a supplier has a clean tax history.

If an overseas supplier cannot produce a UAE-bank confirmation, flag the issue for transaction-specific review. The text does not state a blanket overseas-supplier exemption or an automatic foreign-bank substitute. Imports, reverse charge, intermediaries and overseas payment structures need assessment on their actual facts.

Verify each supply, not just the vendor master

A verified supplier can still issue an invoice for a transaction that needs explanation. Article 4 requires a commercial assessment of the supply and the supplier's involvement. Check pricing or profit margins, ordinary or licensed activities, the authenticity and origin of goods, ownership or the right to dispose of them, and the reason for any intermediary's role.

Purchase scenario	Practical evidence to consider
Goods delivered to a warehouse	Purchase order, delivery record, goods-received note, product or batch details, and origin/ownership evidence appropriate to the goods.
Consulting or other services	Agreed scope, deliverables, completion or acceptance records and correspondence demonstrating the service received.
Large discount or unusual margin	Comparable quotes and a documented reason such as stock clearance, quality differences or contract terms.
Intermediary arranges the supply	Agreement explaining the intermediary's function, entitlement and commercial contribution.
Activity appears inconsistent with the licence	Resolve the inconsistency with valid records and appropriate review before accepting an unsupported explanation.

The table is a suggested evidence approach, not an FTA-prescribed document list. Match it to the transaction: a service acceptance record may be meaningful for consulting, while a goods-received note is meaningful for stock. Neither replaces the other checks in the decision.

Cash, third-party payments and overseas bank accounts

Article 4 prescribes electronic payment. A cash payment requires a documented commercial reason, compliance with the applicable tax-legislation thresholds and a readily verifiable trail. If a third party pays or receives payment, or money goes to an account outside the supplier's country of incorporation, there must be a reasonable commercial explanation consistent with the available evidence.

As a practical control, accounts payable should flag a changed beneficiary, a request to pay a different company or an offshore account that was not in the agreed terms. Confirm the arrangement through a trusted contact and retain the legal and commercial explanation. This is a review step, not a claim that every third-party payment is prohibited.

The September 2026 Executive Regulation adds a related rule in Article 54(3): input tax is not recoverable on a supply above an amount specified by ministerial decision where payment is, or is intended to be, in cash, subject to that decision's controls. The reviewed provision does not itself give a numerical cash cap. Do not substitute AED 10,000, AED 100,000 or AED 375,000 from the supplier-verification decision. Confirm the applicable ministerial decision before approving a material cash-paid claim.

A supplier-verification checklist your team can use

Use one supplier file linked to the relevant purchase records. Assign an owner to missing evidence and record the decision made before input VAT is deducted. The following is an implementation template to adapt; it is not an official FTA form or a certificate of compliance.

Record	Suggested field or evidence	Suggested owner
Supplier identity	Legal name, supplier ID, incorporation/identity evidence and authorised representative	Procurement
Premises and activities	Address evidence, method/date checked, licensed activity and transaction fit	Procurement
Threshold assessment	Relevant supply value; previous and expected next 12-month supplier totals; assumptions and date	Finance
Risk review	Address/personnel changes, unusual transactions, supporting explanations and unresolved issues	Procurement + reviewer
Enhanced checks where triggered	Authorised UAE-bank confirmation and documented review of available public information	Finance + reviewer
Purchase evidence	Contract/order, invoice, delivery or service acceptance, pricing and intermediary rationale	Business owner + accounts payable
Payment evidence	Beneficiary, method, commercial explanation for exceptions, payment reference and supporting records	Accounts payable
Sign-off and refresh	Verifier, reviewer, date, outcome, actions outstanding and next supplier review date	Responsible manager

Article 5 requires documentation of the checks and a retained policy identifying who implements, reviews and supervises them, with clear powers and responsibilities. It also requires supplier verification on first dealing or recurring dealings where the supplier was not verified in the previous 12 months. The taxable-supply assessment is separate from that supplier refresh cycle.

A workable internal policy should explain who can place a claim on hold, who resolves exceptions and how the evidence reaches the VAT-return reviewer. Store identity and banking documents in a controlled business repository with appropriate access. Keep the records for the applicable statutory retention period; Decision No. 13 does not itself create a universal new retention duration.

How to prepare before 1 October 2026

Build the supplier list. Consolidate duplicate vendor records and identify the legal supplier behind trading names.
Calculate both 12-month tests. Use previous purchases and a documented forward view of contracts, recurring orders and expected demand.
Prioritise missing checks. Review high-spend suppliers, unusual payments and suppliers with no verification in the previous 12 months.
Approve the written policy. Allocate responsibility across procurement, the receiving team, accounts payable and the VAT reviewer.
Run a sample purchase through the process. Confirm that invoice, supplier evidence, receipt of supply and payment rationale can be retrieved together.
Brief the people who place orders. Resolve evidence requests during procurement rather than discovering gaps at the VAT-return deadline.
Escalate unresolved cases. Ask an appropriately authorised UAE adviser to assess material interpretation issues, imports, cash arrangements or historical claims affected by suspected evasion.

This sequence is a suggested preparation plan. It does not create extra legal deadlines or imply an automatic retrospective application to every earlier purchase. Transactions spanning the commencement date and deductions taken after that date should be reviewed using their actual supply, documentation and deduction dates.

Latest related changes: Decision 149 and the e-invoicing dates

On 8 September 2026, the Ministry of Finance announced Cabinet Decision No. 149 of 2026 amending the VAT Executive Regulation. It addresses medical products, employee accommodation, the Capital Assets Scheme, single composite supplies, input-tax apportionment and cash-paid supplies. These are separate provisions alongside Decision No. 13, not alternative names for it.

Change	Date or condition to distinguish
FTA Decision No. 13 — supplier and supply verification	Effective 1 October 2026.
Cabinet Decision No. 149 — Executive Regulation amendments	The consolidated text lists an overall 1 October 2026 effective date. Check specific deferred provisions.
Amended Article 55(6) and (7) — input-tax apportionment	The consolidation's footnotes defer these changes to the first tax year commencing after 1 October 2027.
E-invoicing ASP appointment: in-scope persons with revenue at least AED 50 million	30 October 2026 under Ministerial Decision No. 66 of 2026.
E-invoicing implementation for that revenue band	1 January 2027; the ASP appointment extension did not change this date.

For the e-invoicing revenue band, the amendment says equal to or exceeds AED 50,000,000. Businesses exactly at AED 50 million should not rely on a shortened exceeds-only summary. E-invoicing has its own scope and exclusions; selecting a provider does not complete the supplier-verification work required for input VAT.

Discuss your UAE VAT readiness with NRS

For an India-UAE business, the useful starting point is a defined readiness review: which suppliers need evidence, which purchase and payment controls need attention, and which issues require UAE specialist input. NRS can discuss finance-process review, record organisation and cross-border compliance coordination within an agreed engagement, working with appropriately authorised overseas providers where required.

In your first enquiry, mention your business activity, UAE VAT-registration status, approximate number of suppliers, whether any supplier spend exceeds AED 375,000 and your target readiness date. Ask for a scope covering supplier-file gaps, a verification-policy outline and responsibilities for local advice. Share a high-level description initially; identity and bank documents can be requested through an agreed secure channel if an engagement proceeds.

Frequently asked questions about UAE VAT supplier verification

What are the new UAE VAT rules from 1 October 2026?

FTA Decision No. 13 of 2026 introduces supplier and supply verification procedures before input VAT deduction, subject to its small-supply exception. Cabinet Decision No. 149 of 2026 separately amends the VAT Executive Regulation. The supplier-verification deadline is not the e-invoicing implementation deadline.

Is this UAE Rule 13 or FTA Decision No. 13 of 2026?

The correct reference is Federal Tax Authority Decision No. 13 of 2026, issued on 22 July 2026 and effective from 1 October 2026. It implements verification procedures for Article 54(bis) of the UAE VAT Law. It is unrelated to India's GST Rule 14A.

Is a purchase of exactly AED 10,000 exempt from verification?

No. Article 6 uses a consideration of less than AED 10,000, excluding VAT. A supply of exactly AED 10,000 before VAT does not qualify for that exception. For a smaller supply, also test the same supplier's previous and expected next 12-month totals against AED 100,000.

Does the AED 100,000 supplier limit reset on 1 January?

The decision tests supplies received over the previous 12 months and supplies expected over the next 12 months. It is not simply a January-to-December allowance. Exceeding AED 100,000 in either test removes the small-supply exception.

Does an invoice with a valid UAE TRN satisfy the new rule?

TRN verification is a useful registration check, but it does not establish all the supplier, premises, commercial-substance, payment and documentation conditions in Decision No. 13. An invoice and a successful TRN lookup do not replace the required verification.

Must every supplier provide a UAE bank confirmation?

Article 3(4) adds that requirement when supplies from the supplier exceed AED 375,000 in the previous 12 months or are expected to exceed it in the next 12 months. The written confirmation must come from an authorised UAE bank, confirm the supplier has an account and contain no relevant reservations or conditions. It need not be addressed to the buyer.

Are existing suppliers exempt from the October 2026 checks?

There is no general exemption for longstanding suppliers. Article 5 requires supplier verification on first dealing, or on recurring dealings when no verification has been performed in the previous 12 months, subject to Article 6. Each taxable supply received or accepted also needs the applicable transaction checks.

Does Decision No. 13 ban all cash purchases?

No. It prescribes electronic payment and allows cash subject to a documented commercial reason, applicable tax-law thresholds and easy verification. The amended Executive Regulation also provides for a separate ministerial threshold affecting input VAT recovery on cash-paid supplies. AED 10,000 in Decision No. 13 is not a general cash-payment limit.

Can a UAE free-zone business ignore supplier due diligence?

Decision No. 13 contains no general free-zone exemption. Assess whether the entity is a taxable person and the relevant supply and input VAT fall within the rules. Free-zone status, designated-zone treatment and corporate-tax treatment do not by themselves resolve this VAT question.

Does missing one document automatically cancel all input VAT?

Article 54(bis) concerns a supply or supply chain connected with tax evasion and actual or deemed knowledge. Failure to perform the prescribed verification matters to the should-have-known test. It is inaccurate to say that one missing document automatically cancels every input VAT claim. Ordinary recovery and record requirements still apply.

Can NRS help an India-UAE business prepare?

NRS can discuss supplier-record organisation, finance-process review and India-UAE compliance coordination within an agreed scope. Where local tax advice, representation or other reserved work requires UAE authorisation, an appropriately authorised provider must perform or confirm that work. Start with the business activity, supplier volume and the deadline you need to meet.